Hong Lai Huat changes intended use of proposed rights issue proceeds

Published Sun, Dec 27, 2020 · 02:39 PM

HONG Lai Huat has announced a change in the intended use of the proceeds from its proposed renounceable non-underwritten rights issue unveiled earlier this month.

The change applies to the maximum subscription scenario, which would result in net proceeds of about S$26.3 million from the rights issue - after deducting some S$600,000 in expenses.

Some 54.8 per cent of the net proceeds, or S$14.41 million, will now go towards the repayment of outstanding debt to Hong Lai Huat's group chief executive, Ong Bee Huat. (He has given an irrevocable undertaking to subscribe for his pro rata entitlement as well as excess rights shares.)

This S$14.4 million will come from three sources, including re-allocating the part of the rights issue proceeds originally allocated for the repayment of bank borrowings.

In a regulatory filing with the Singapore Exchange on Sunday, Hong Lai Huat said that following a review of the repayment terms and interest rates of the group's existing bank borrowings, the board has determined that the group's internal resources are sufficient for the repayment of the bank borrowings as and when they fall due.

Also re-allocated towards the repayment of outstanding debt to Mr Ong are a portion of the proceeds originally allocated to the project development cost for the group's ongoing second mixed-use project, Royal Platinum, in Toul Kork in Phnom Penh; and to new project land and development costs for the group's third mixed-use development, also in Toul Kork.